national rice policies in asia
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National rice policies in Asia. David Dawe Agricultural Development Economics Division and Regional Office for Asia and the Pacific, FAO Bangkok, Thailand, 28 November 2013. Some key objectives of rice policies. Farmer income Consumer welfare Price stability Self-sufficiency - PowerPoint PPT PresentationTRANSCRIPT
Agricultural Development Economics Division (ESA)Food and Agriculture Organization of the United Nations
National rice policies in Asia
David DaweAgricultural Development Economics Division and Regional Office for Asia
and the Pacific, FAO
Bangkok, Thailand, 28 November 2013
Bangkok, Thailand 28 November 2013 2Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Some key objectives of rice policies
Farmer income
Consumer welfare
Price stability
Self-sufficiency
Environment preservation
Bangkok, Thailand 28 November 2013 3Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
“Weights” for key objectives of rice policy
Different countries have different objectives
Bangkok, Thailand 28 November 2013 4Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Some key determinants of rice policy objectives
Level of economic development
Trade status (exporter or importer)
Country size (China, India)
Bangkok, Thailand 28 November 2013 5Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Some key types of rice policies
Level of stocks
Trade controls
Bangkok, Thailand 28 November 2013 6Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Different purposes for holding stocks
Working
Emergency
Buffer (price stabilization)
International stocks
Level of stocks
Bangkok, Thailand 28 November 2013 7Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Advantages and disadvantages
Enhanced food security (e.g. food for work, disaster relief, protection against domestic production shocks, world price spikes and delays in arrival of imports)
Interest costs, quality deterioration
Level of stocks
Bangkok, Thailand 28 November 2013 8Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Different objectives of trade controls
Change the average level of prices
Change the volatility of prices
But any instruments used to affect one will usually affect the other as well
Trade controls
Bangkok, Thailand 28 November 2013 9Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Advantages and disadvantages
Less exposure to world markets, greater income for farmers, increased incentives for raising productivity
More poverty (especially in importers), worse nutrition, impede crop diversification, higher wages that reduce industrial competitiveness, more wheat imports, efficiency losses
Higher prices/self-sufficiency
Bangkok, Thailand 28 November 2013 10Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Advantages and disadvantages
Greater macro and political stability, lower likelihood of farmers and poor consumers falling into poverty traps
Can be expensive to operate, especially if government procurement is a large share of domestic production
Price stabilization
Bangkok, Thailand 28 November 2013 11Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Different instruments to control trade
Laissez-faire, or free market
Control of trade using tariffs (P)
Control of trade using quantitative restrictions (Q)
Trade controls
Bangkok, Thailand 28 November 2013 12Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Advantages and disadvantages of free market policies
Greater short-run economic efficiency
Loss of control over a key political variable (the price of rice), potentially greater economic instability
Trade controls
Bangkok, Thailand 28 November 2013 13Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Advantages and disadvantages of tariff-based policies
Potential for less uncertainty for traders, consumers & producers (especially if a schedule is used)
Feeling of less control, tariff schedules are illegal under WTO
Trade controls
Bangkok, Thailand 28 November 2013 14Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Advantages and disadvantages of policies that control quantities
Feeling of greater direct control
Greater uncertainty for private economic actors, prone to government policy errors
Trade controls
Bangkok, Thailand 28 November 2013 15Regional Office for Asia and the Pacific
Food and Agriculture Organization of the United Nations
Agricultural Development Economics Division (ESA)
Thank you for your kind attention